Gartner’s 2011 CEO and CIO agendas highlight a worrying disconnect between senior executives’ perceptions of IT performance.
Globally, CEOs and CIOs in financial service institutions (FSIs), for instance, believe IT performance is only average. But, CIOs faith in their IT organisations’ ability to deliver technology innovations, technical flexibility and service levels is stronger than CEOs in the sector.
CEOs do view IT as a key driver of and contributor to business growth but 53 per cent still consider IT as a black box and have no plans to analyse it.
In the UK FS sector, 30 per cent of CEOs (compared with 19 per cent from other regions) report not knowing the possibilities for the next major IT-enabled strategic innovation.
In industries outside of financial services (FS), the views of CEOs and CIOs on IT performance seem to be in closer alignment.
This could reflect lower criticality of IT in those industries and, therefore, the potential or perceived lower performance requirements. By contrast, the FS industry operates almost entirely on IT so performance expectations are higher.
Further, it can be hard for the CIO to convey the extent and tangibility of absolute or improved IT performance.
Identifying the specific input of IT among multiple variables and its contribution is extremely difficult. CIOs need to express the strategic vision they have for IT in the context of how IT can re-engineer business processes, create new business models and improve business outputs as opposed to inputs.
There is often a greater vagueness attached to the role of the CIO, particularly in terms of business responsibilities, than say the CEO or CFO.
Is the CIO responsible for the fundamentals of IT delivery such as keeping the lights on in the data centre, or the ATMs running? Or is the CIO responsible for the strategic application of technologies to produce profitable growth such as via the identification and deployment of a social media strategy? These two roles are not the same.
The situation is exacerbated by the combination of the COO and CIO’s role in several organisations.
Even up to 2015, 53 per cent of FIs have no plans to add the means to encourage their CIO’s performance against a personal revenue target. This implies that the majority of firms perceive the CIO role as more of an order taker, responsible for run-the-bank operations.
It could of course be the case that IT performance is actually poorer than CIOs believe. If this is the case, there still remains a communication and knowledge transfer issue between IT and the business, which needs addressing.
Closing the gap and raising IT performance levels requires CIOs to manage CEO expectations and performance. CIOs should assess internal business executives’ expectations of performance and set clear performance-measured targets.
If business leaders’ responses reflect concerns about micro-issues of IT delivery (such as access to iPads), CIOs need to reposition IT’s role in the organisation and develop metrics that can better align with strategic business goals.
IT leaders may also need to develop a staged communication and education plan for their senior business peers to introduce key concepts gradually, and use the actual experiences of the organisation as learning opportunities.
Publicised technology-related malfunctions continue to undermine the perception of IT performance. Focusing on transformation and innovation is all well and good — but the reliability and IT foundation of run-the-bank operations have to be solid first.
That means simplification, standardisation and rationalisation. IT leaders sometimes become so focused on chasing new projects that they shift the bulk of their talent away from run-the-business operations, leaving them short-staffed — often with their less capable personnel.
Business users get frustrated when they feel that IT is not responding (or lacks the competence to respond) to urgent, but routine, needs — especially if the benefits from new, exciting projects won’t be realised until some point in the future.
CIOs should keep sufficient numbers of capable personnel focused on routine projects. Timely maintenance and small enhancements that address minor, but irritating, business issues often generate substantial goodwill.
Maintaining a regular stream of small wins is a great way to increase business user satisfaction and buy time for heavy lifting that may be taking place within projects that involve significant change.
Unless CEOs change CIO incentives and measurements for IT success, IT performance for enterprise strategic initiatives will continue to suffer in relation to business expectations.
David Furlonger is vice president and Fellow at Gartner
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